The main event in 2019 has been the explicit commitment of Fineco´s Board of Directors to achieve ESG integration in 100% of AuM by the end of 2021. With the launch of the new website (delayed by covid-19, which is generating urgent responses to critical issues), there will be a clear statement of the commitment (and therefore, accountability) of Fineco towards sustainable finance and also, a commitment to be sustainable towards all of our stakeholders.
In relation to investing, for internally managed funds, all of our analysts and portfolio managers have improved their approach towards integrating ESG metrics whether it is for equities or for fixed income worlds (sovereign, corporates and financials). We integrate external data we receive from MSCI ESG Research with internal indicators and with a new alert system for controversies that each analyst closely monitors in order for portfolio managers take quick decisions and avoid unnecessary risks (as it happened with Iberdrola, where we finally decided to sell the shares with the investigation to top executives)
In relation to equities, we have reached an agreement with Alembeeks to help us do the proxy voting. However, we first worked on our own to set up our own voting guidelines and then we signed the contract at the end of 2019 with Alembeeks so that we can learn and have better criteria for some topics where we might be less knowledgeable. Therefore, although we haven´t taken part in General Assemblies in 2019 (except for those companies where there was a premium to attend and where we held at least 1% of their market cap), during 2019 Fineco has decided to give important steps in the right direction in terms of active ownership and Fineco has started implementing it. In terms of engagement, we are analyzing how we can contribute to specific projects and we expect in 2020 to participate in at least one important engagement process.
In October 2019, we got our first fund ESG labelled by Aenor (we tried to do it with Le Label ISR but after several weeks, we were told that we needed to have our fund marketed in France -although it was UCITS fund- and that was too intense in resources since all the documents of the fund had to be translated to French and start a process of marketing it in France and it was too cumbersome).
For externally managed funds, we have improved the questionnaire in our due diligence process in relation to ESG scoring to be more strict with the funds we include in our funds of funds. And for the fixed income fund ("Fon Fineco Renta Fija Internacional") where Pimco and Amundi are managing their own portfolios, we have increased the reporting requirements and the screening of their decisions and ESG investment processes. In 2020 we are planning to have this fund ESG labelled as well, which is going to give us a qualitative jump in our capacities and knowledge because it will aggregate different ways of understanding ESG world, different investment processes, different reporting metrics, etc.
One key event in 2019 has been the creation of an ESG committee with independent members in order to monitor and foster Fineco´s efforts in providing more comprehensive and better ESG investment solutions to clients. The committee focuses on the monitoring of the integration of ESG variables in the investment process of the funds, checking how controversies impact the decision process in the funds, and proposing ESG education courses and requirements for the broad range of employees in Fineco, among other tasks.
Lastly, another new event in 2019 has been Fineco´s increasing effort in expanding the awareness of the importance of ESG criteria in the investment world. Not only we continued working with public and private entities in co-organizing the third edition of the "Biscay ESG Global Summit" and the second edition of the ESG summer programme at the Deusto Business School, but we took part (for the first time) as speakers in two international forums in London (June) and Amsterdam (October) organized by EthicalCorp, sharing panels with entities such as Blackrock, HSBC or corporates such as DSM.